IDEAS home Printed from https://ideas.repec.org/p/ein/tuecis/1103.html
   My bibliography  Save this paper

Optimal modularity: A demonstration of the evolutionary advantage of modular architectures

Author

Listed:
  • Koen Frenken
  • Stefan Mendritzki

Abstract

Modularity is an important concept in evolutionary theorizing but lack of a consistent definition renders study difficult. Using the generalised NK-model of fitness landscapes, we differentiate modularity from decomposability. Modular and decomposable systems are both composed of subsystems but in the former these subsystems are connected via interface standards while in the latter subsystems are completely isolated. We derive the optimal level of modularity, which minimises the time required to globally optimise a system, both for the case of two-layered systems and for the general case of multi-layered hierarchical systems containing modules within modules. This derivation supports the hypothesis of modularity as a mechanism to increase the speed of evolution. Our formal definition clarifies the concept of modularity and provides a framework and an analytical baseline for further research.

Suggested Citation

  • Koen Frenken & Stefan Mendritzki, 2011. "Optimal modularity: A demonstration of the evolutionary advantage of modular architectures," Working Papers 11-03, Eindhoven Center for Innovation Studies, revised Jun 2011.
  • Handle: RePEc:ein:tuecis:1103
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tommaso Ciarli & Marco Valente & Riccardo Leoncini & Sandro Montresor, 2009. "Technological change and the vertical organization of industries," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 115-135, Springer.
    2. Giovanni Gavetti & Daniel A. Levinthal & Jan W. Rivkin, 2005. "Strategy making in novel and complex worlds: the power of analogy," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 691-712, August.
    3. Marengo, Luigi, et al, 2000. "The Structure of Problem-Solving Knowledge and the Structure of Organizations," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(4), pages 757-788, December.
    4. Marengo, Luigi & Dosi, Giovanni, 2005. "Division of labor, organizational coordination and market mechanisms in collective problem-solving," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 303-326, October.
    5. Koen Frenken & Luigi Marengo & Marco Valente, 1999. "Interdependencies, nearly-decomposability and adaption," CEEL Working Papers 9903, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    6. Scott E. Page, 1996. "Two measures of difficulty (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 321-346.
    7. Sendil K. Ethiraj & Daniel Levinthal, 2004. "Modularity and Innovation in Complex Systems," Management Science, INFORMS, vol. 50(2), pages 159-173, February.
    8. Herbert A. Simon, 2002. "Near decomposability and the speed of evolution," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 587-599, June.
    9. Frenken, Koen, 2006. "A fitness landscape approach to technological complexity, modularity, and vertical disintegration," Structural Change and Economic Dynamics, Elsevier, vol. 17(3), pages 288-305, September.
    10. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, December.
    11. Richard Langlois & Giampaolo Garzarelli, 2008. "Of Hackers and Hairdressers: Modularity and the Organizational Economics of Open-source Collaboration," Industry and Innovation, Taylor & Francis Journals, vol. 15(2), pages 125-143.
    12. Jan W. Rivkin & Nicolaj Siggelkow, 2007. "Patterned Interactions in Complex Systems: Implications for Exploration," Management Science, INFORMS, vol. 53(7), pages 1068-1085, July.
    13. Stefano Brusoni & Luigi Marengo & Andrea Prencipe & Marco Valente, 2004. "The Value and Costs of Modularity: A Cognitive Perspective," SPRU Working Paper Series 123, SPRU - Science Policy Research Unit, University of Sussex Business School.
    14. Page, Scott E, 1996. "Two Measures of Difficulty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 321-346, August.
    15. Koen Frenken & Alessandro Nuvolari, 2004. "The early development of the steam engine: an evolutionary interpretation using complexity theory," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(2), pages 419-450, April.
    16. Arthur, W. Brian, 2007. "The structure of invention," Research Policy, Elsevier, vol. 36(2), pages 274-287, March.
    17. Daniel A. Levinthal, 1997. "Adaptation on Rugged Landscapes," Management Science, INFORMS, vol. 43(7), pages 934-950, July.
    18. Sylvie Geisendorf, 2010. "Searching NK Fitness Landscapes: On the Trade Off Between Speed and Quality in Complex Problem Solving," Computational Economics, Springer;Society for Computational Economics, vol. 35(4), pages 395-406, April.
    19. Carliss Y. Baldwin, 2008. "Where do transactions come from? Modularity, transactions, and the boundaries of firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(1), pages 155-195, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amrit Tiwana, 2018. "Platform Synergy: Architectural Origins and Competitive Consequences," Information Systems Research, INFORMS, vol. 29(4), pages 829-848, December.
    2. Marta Gancarczyk & Jacek Gancarczyk & Joanna Bohatkiewicz, 2017. "SME Roles in Modular Value Chains: Perspectives for Growth and Innovativeness," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 5(3), pages 95-117.
    3. Sunghoon Nam & Jongsik Yoon & Kyungrai Kim & Byungjoo Choi, 2020. "Optimization of Prefabricated Components in Housing Modular Construction," Sustainability, MDPI, vol. 12(24), pages 1-22, December.
    4. Mastrogiorgio, Mariano & Gilsing, Victor, 2016. "Innovation through exaptation and its determinants: The role of technological complexity, analogy making & patent scope," Research Policy, Elsevier, vol. 45(7), pages 1419-1435.
    5. Luo, Jianxi, 2018. "Architecture and evolvability of innovation ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 132-144.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Khraisha, Tamer, 2020. "Complex economic problems and fitness landscapes: Assessment and methodological perspectives," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 390-407.
    2. Gang Zhang & Ruoyang Gao, 2010. "Modularity and incremental innovation: the roles of design rules and organizational communication," Computational and Mathematical Organization Theory, Springer, vol. 16(2), pages 171-200, June.
    3. Giovanni Dosi & Marco Faillo & Luigi Marengo & Daniele Moschella, 2011. "Toward Formal Representations of Search Processes and Routines in Organizational Problem Solving. An Assessment of the State of the Art," LEM Papers Series 2011/04, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Marco Valente, 2014. "An NK-like model for complexity," Journal of Evolutionary Economics, Springer, vol. 24(1), pages 107-134, January.
    5. Singh, Anuraag & Triulzi, Giorgio & Magee, Christopher L., 2021. "Technological improvement rate predictions for all technologies: Use of patent data and an extended domain description," Research Policy, Elsevier, vol. 50(9).
    6. Frenken, Koen, 2006. "A fitness landscape approach to technological complexity, modularity, and vertical disintegration," Structural Change and Economic Dynamics, Elsevier, vol. 17(3), pages 288-305, September.
    7. Oliver Baumann & Nicolaj Siggelkow, 2013. "Dealing with Complexity: Integrated vs. Chunky Search Processes," Organization Science, INFORMS, vol. 24(1), pages 116-132, February.
    8. Koen Frenken & Alessandro Nuvolari, 2004. "Entropy statistics as a framework to analyse technological evolution," Chapters, in: John Foster & Werner Hölzl (ed.), Applied Evolutionary Economics and Complex Systems, chapter 5, Edward Elgar Publishing.
    9. Leonardo Bargigli, 2005. "The limits of modularity in innovation and production," KITeS Working Papers 176, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Sep 2005.
    10. Luo, Jianxi, 2018. "Architecture and evolvability of innovation ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 132-144.
    11. Juha Uotila, 2018. "Punctuated equilibrium or ambidexterity: dynamics of incremental and radical organizational change over time," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 131-148.
    12. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    13. Giovanni Dosi & Daniel A. Levinthal & Luigi Marengo, 2003. "Bridging contested terrain: linking incentive-based and learning perspectives on organizational evolution," Industrial and Corporate Change, Oxford University Press, vol. 12(2), pages 413-436, April.
    14. Friederike Wall, 2016. "Agent-based modeling in managerial science: an illustrative survey and study," Review of Managerial Science, Springer, vol. 10(1), pages 135-193, January.
    15. William Martin Tracy & M. V. Shyam Kumar & William Paczkowski, 2013. "Parametric interdependence, learning-by-doing, and industrial structure," Computational and Mathematical Organization Theory, Springer, vol. 19(4), pages 580-600, December.
    16. Sai Yayavaram & Sasanka Sekhar Chanda, 2023. "Decision making under high complexity: a computational model for the science of muddling through," Computational and Mathematical Organization Theory, Springer, vol. 29(2), pages 300-335, June.
    17. Giovanni Dosi & Marco Faillo & Luigi Marengo, 2006. "Modeling Routines and Organizational Learning. A Discussion of the State-of-the-Art," LEM Papers Series 2006/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    18. Marengo, Luigi & Dosi, Giovanni, 2005. "Division of labor, organizational coordination and market mechanisms in collective problem-solving," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 303-326, October.
    19. Andreas Reinstaller, 2012. "Modularity and its Implications for the Theory of the Firm," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 32, Edward Elgar Publishing.
    20. Yue Maggie Zhou, 2013. "Designing for Complexity: Using Divisions and Hierarchy to Manage Complex Tasks," Organization Science, INFORMS, vol. 24(2), pages 339-355, April.

    More about this item

    Keywords

    Modularity; Decomposability; Near-decomposability; Complexity; NK-model; Search; hierarchy;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ein:tuecis:1103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ectuenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.